WASHINGTON -- Information technology may not be the panacea that cures the nation's healthcare system, but a key senator said that it will be indispensable to the major reforms that Congress plans to debate this session.

"Everybody sees it as a silver bullet," Sen. Barbara Mikulski, D-Md., said this morning at a hearing of the Senate Committee on Health, Education, Labor and Pensions. "Well, we believe it is one of the major tools, and that we cannot do healthcare reform without it."

But Mikulski, who declared herself a skeptic of health IT, warned against a "techno-boondoggle" that could result from the government throwing money at the industry without taking steps to hold providers accountable for improving the patients' quality of care. "We can't afford to waste time or waste money. We don't have either one," she said.

The hearing comes as Congress considers President-elect Obama's massive economic stimulus package, which currently includes roughly $20 billion in government funding for health IT, a spokeswoman for Mikulski told InternetNews.com. That figure, she said, is only a proposal, and is subject to change. Mikulski said the Senate plans to mark up the bill in the next week or two.

A panel of experts involved in the debate over health IT testified at this morning's hearing that electronic health records (EHRs) and other digital measures would streamline the medical industry and help reduce treatment errors.

Mikulski estimates that just 4 percent of U.S. physicians currently use fully functioning EHRs, while just 17 percent have basic EHRs. With as many as 98,000 preventable deaths occurring at U.S. hospitals each year, technology that gave doctors access to a patient's comprehensive medical history through a simple digital interface would save lives, she said.

Among the witnesses, the lone representative of the private sector was Peter Neupert, corporate vice president for Microsoft's Health Solutions group. Microsoft (NASDAQ: MSFT), like its rival Google (NASDAQ: GOOG), has launched an ambitious digital healthcare portal where patients can access their records, and developers are invited to build applications to make medical data more usable.

"We see a dynamic, patient-centric health system that transforms how physicians provide care and individuals manage their health -- a totally connected network enabling the seamless exchange and reuse of health data," Neupert said.

Microsoft aims to "empower consumers to be the stewards of their own healthcare data," Neupert said, drawing a parallel with the credit reporting bureaus, where consumers can access their credit records and scores.

Companies like Microsoft and Google are likely to play a key role in any federal program overseeing health IT, lawmakers said.

"We know that we can't develop the system in-house," Mikulski said. "This is not a system that is going to be developed inside [the Department of Health and Human Services]."

"This isn't like building an airfield," she said, adding that the government is going to lean on the private sector to handle ongoing upgrades to the health industry's IT infrastructure.

As they consider the stimulus package, whose price tag has now swelled to around $825 billion, lawmakers are looking for clear goals and accountability before they allocate funds.

Several of the panelists called for measurable reporting mechanisms by which doctors could demonstrate how they have improved care through federally funded IT.

"As you consider the economic stimulus package, Congress should be clear on what it wants from a return on its investment," said Jack Cochran, executive director of the Permanente Federation and the only medical doctor among the witnesses.